Arroyo and Others v Equion Energia Ltd (formerly known as BP Exploration Company (Colombia) Ltd)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Stuart-Smith |
| Judgment Date | 27 July 2016 |
| Neutral Citation | [2016] EWHC 1699 (TCC) |
| Docket Number | Case No: HT-2013-000003 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 27 July 2016 |
[2016] EWHC 1699 (TCC)
The Honourable Mr Justice Stuart-Smith
OCENSA PIPELINE GROUP LITIGATION
Case No: HT-2013-000003
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
The Rolls Building
Fetter Lane, EC4A 1NL
Alexander Layton QC, Sudhanshu Swaroop, Justine Thornton, Angharad Parry and Claire McGregor (instructed by Leigh Day) for the Claimants
Charles Gibson QC, Oliver CampbellQC, Christopher Lewis, Noel DilworthandKathleen Donnelly (instructed by Freshfields Bruckhaus Deringer LLP) for the Defendant
Hearing dates: 2 October 2014, 15 October 2014 – 5 March 2015
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Large-scale civil engineering and infrastructure projects routinely give rise to public benefit and private detriment, whether they be in the Cotswolds or the Andes. This case involves the consequences of laying a pipeline in Colombia in the mid-1990s, which ran from the oil-fields of Cusiana and Cupiagua in the South to the sea at Coveñas in the North. Construction work commenced in about December 1995 and continued until August 1997 { J24/82T/1}. The pipeline is known as the Ocensa pipeline for reasons that will appear. It passed through regions characterised by difficult terrain, fragile soils, tropical rainfall, and a lawless lack of security; and in doing so it passed through many and varied private land-holdings. For all of these reasons it was a challenging undertaking.
The benefits of such a pipeline to the Colombian economy and public need hardly be stated. At the same time, the potential detriments to private landowners whose properties were affected by the creation of and works on a Right of Way ["the ROW"] that was seldom (if ever) less than 25 metres wide and in which the pipeline was laid are easy to imagine. In particular, it was well known at all material times that the stripping of the land, storage of quantities of soil, working with heavy machinery, and crossing of watercourses gave rise to a risk of erosion of materials from the ROW, especially if disturbed or newly reinstated soil was subject to heavy rainfall. To obviate that risk, temporary and permanent works were undertaken that were intended to minimise or prevent erosion.
There was nothing new in the recognition of the risks inherent in the laying of the Ocensa pipeline, though the protective techniques were subject to development with time. One of the features of the Ocensa project was that for much of its course it followed the path of another pipeline ["the ODC pipeline"] so that much of the work for the Ocensa pipeline took place on or adjacent to what had been the ROW for the ODC pipeline when it had been laid in about 1990–1992.
This litigation is brought by 109 claimants in respect of 73 farms, each of whom claims that the Ocensa pipeline caused damage for which he or she should be compensated. It is brought in England because the Defendant was at the relevant time an English subsidiary of BP and was involved in the Ocensa project. The substantive claims are subject to the Colombian law of torts and contract. The State of Colombia formally recognises the public benefit attaching to oil pipeline projects and has established a regulatory legal framework that reflects the tension between public benefit and private detriment to which I have already referred. Whether and to what extent that framework creates, limits or excludes private law rights is only one of the elements of Colombian law affecting the outcome of this litigation.
The existence of 74 claims led the parties and the Court initially to choose 10 and to treat them as "lead cases" in the hope that decisions of the Court on those 10 would lead to resolution of all or most of the others. This approach was proportionate, sensible and inevitable given that each claim is fact specific and, although financially significant for the individual claimants, the claims are not enormous in absolute terms. In the event, as the accumulated evidence for the lead cases expanded, the parties agreed that it was only feasible to try four cases in the period allotted by the Court for the trial. This judgment is the result of the trial of those four cases, which took 62 court days of openings, evidence and closing submissions. The time spent in court was only the tip of an iceberg of time and effort invested by the parties. The trial bundle was about 135,000 pages, including expert evidence that took up about 45,000 pages. The Court did not visit Colombia but over 20 hours of film footage and many photographs have been available which provide important evidence both for the experts and for the Court. Closing submissions were formidably ordered, cross-referenced and presented in texts of over 2400 pages plus numerous attachments. It might be thought that, with such an abundance of material, no stone has been left unturned, and so it has sometimes felt. Even so, the documentation was not complete, not every witness who might have had relevant evidence to give was called, and the pressures on those conducting the litigation to concentrate on a selection of the most important aspects of the litigation were considerable.
Because I have been unable to make the judgment shorter, I should issue two health warnings for anyone tempted to read it. First, while the trial and its outcome are of intense interest to those directly involved, I doubt whether my attempts to determine how the Supreme Court of Colombia would apply Colombian law to the facts of these cases will interest or influence either English or Colombian lawyers who are not obliged to read them. Second, I think it unlikely that the detailed facts underlying the individual claims will be of general interest. Also, it should be understood that, although I have considered and taken into account the entirety of the closing submissions on both sides (including following every hyperlinked reference in those submissions) when preparing and writing the judgment I have not attempted to set out every argument or to refer to every piece of evidence in the judgment. To follow the traditional format of setting out both sides' arguments and all of the evidence relied upon would probably have doubled the length of the judgment and the time taken to produce it. I have therefore attempted to synthesise the positions adopted and the main arguments advanced by the parties, without necessarily setting out everything on which the parties have relied, and have referred to evidence to the extent necessary for coherence. In particular, I have generally given the page reference for the evidence on which I have relied for my findings rather than setting out all relevant evidence either by reference or in full.
In briefest outline, I have concluded that all four of the Lead Claims that are the direct subject of this action fail. Very largely they fail on the facts; but I have in each case also considered the legal basis on which the Claims were brought and the application of relevant principles of Colombian Law to each claim. The purpose of this judgment is to decide the four Trial Lead Claims and to provide a basis for the resolution of the claims regarding the 69 farms that were not considered in detail at the trial. To that end I have, as requested, made extensive findings about Colomibian Law irrespective of their direct applicability to the four Trial Lead Cases. I have also considered the entire body of expert evidence in considerable detail, outlining what appear to an English Court to be the strengths and weaknesses of the expert evidence that was led and tested at trial. That has been made necessary partly in order to reach necessary findings in the Trial Lead Cases and partly so that the parties may appreciate their general position on the expert evidence when considering the merits of the cases that were not tried.
Index
| Section | Paragraphs |
| 1. Preliminary | 1 |
| 2. Index | - |
| 3. Legal Framework | 9 |
| 4. The Lay Witnesses | 247 |
| 5. General Narrative | 253 |
| 6. Procedural History | 397 |
| 7. Legal Responsibility | 418 |
| 8. The Four Trial Claims | 490 |
| 9. The Lay Witnesses | 492 |
| 10. The Expert Evidence | 494 |
| Geotechnical Engineering & Photointerpretation | 503 |
| Hydrology & Water Quality | 618 |
| Agrology | 723 |
| Agronomy | 767 |
| Fishing and Aquaculture | 793 |
| Veterinary Science | 817 |
| Pipeline Project Management | 886 |
| Economics and Pricing | 888 |
| 11. Note on Expert Evidence | 921 |
| 12. Lead Claimant 54 in Detail | 925 |
| 13. Lead Claimant 74 in Detail | 1133 |
| 14. Lead Claimant 39 in Detail | 1410 |
| 15. Lead Claimant 50 in Detail | 1649 |
The Legal Framework.
Section Index
Applicability of Colombian Law
| Applicability of Colombian Law | 9 |
| The Experts | 17 |
| The Hierarchy of Colombian Law | 20 |
| Rules for the Interpretation of the Law | 23 |
| The Regulatory Framework | 24 |
| The Codes of Mines 1887, 1947 and 1988 | 26 |
| The Exploitation of Oil and the Petroleum Codes | 37 |
| Ecopetrol and Association Contracts | 44 |
| The Requirements for the existence of a contract and/or valid contractual obligations | 48 |
| Principles and rules for the interpretation of contracts | 71 |
| The Duty of Good Faith in Contract | 74 |
| Due Care in the Performance of the Contract | 104 |
| Abuse of Rights in Contract and Tort | 105 |
| Circumstances in which a contract is superseded or extinguished by a later agreement. | ... |
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